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What Is the Future of Austin as a Tech Hub?
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By Marc Vartabedian, WSJ Pro
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Good day. In 2024, Big Tech employment declined 1.6% in Austin, and startup employment fell 4.9%, according to a recent report from venture-capital firm SignalFire. How do venture investors that are either based in Austin or do business there view the region’s future as a tech hub? Please email responses to vcnews@wsj.com.
Last week, we asked you what strategies you use to run taut startups that still meet their objectives. Here are responses, edited for length and clarity.
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Marc Sacal, CEO of AstroPay: “We eliminated unnecessary manager layers. There are only three levels between our most junior employee and me. We don’t have managers of managers, and we’ve increased our manager to employee ratio from 1:4 to 1:9 with plans to make it above 1:12 by the end of year. We publish our salaries internally (as percentiles), do not have 1:1 meetings and all of our communication happens in public Slack channels.”
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Oliver Libby, managing partner at H/L Ventures: “There are a large number of strategies for running a lean startup. The tools we have now—from AI to fractional work to working remotely to better software solutions—make this ever easier to do. But the bottom line is that we are looking at a generation of startups that are going to have to do more with less, think about unit economics and profitability way earlier than in recent memory and build companies that make economic sense in outcomes more than just a unicorn IPO.”
Note to readers: The VC Daily newsletter won't be published Monday in observance of Memorial Day. We will be back Tuesday.
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And now on to the news...
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PHOTO: MICHAEL NAGLE/BLOOMBERG NEWS
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Hinge Health goes public. Shares of Hinge Health jumped on their first day of trading on the New York Stock Exchange, giving a much-needed win to a digital-health industry that’s been starved of initial public offerings, WSJ Pro reports. Hinge, which uses technology to largely automate care for joint and muscle health, went public at $32, the top of its expected range, and its shares climbed 17.4% to close at $37.56. Hinge’s venture backers include Bessemer Venture Partners, Insight Partners, Atomico and others.
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Venture-Debt Fundraising Slides Despite Private-Credit Boom
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Fundraising for venture-debt strategies has fallen sharply despite continuing strong demand for private-credit investment opportunities, WSJ Pro reports. New investible capital to provide loans to venture-backed startups fell about 63% to $1.3 billion last year from $3.5 billion in 2023, matching a 17-year peak reached in 2022, according to research provider PitchBook Data. Growth-stage companies often turn to financing from venture lenders as an alternative to seeking new investments from venture and growth capital providers and as a way to avoid diluting their equity.
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OpenAI Commits to Giant U.A.E. Data Center in Global Expansion
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OpenAI said it was partnering with United Arab Emirates firm G42 and others to build a huge artificial-intelligence data center in Abu Dhabi, the ChatGPT maker’s first large-scale project outside the U.S., WSJ reports. OpenAI and G42 said Thursday the data center would have a capacity of 1 gigawatt, putting it among the most powerful in the world. The project, called Stargate UAE, is part of a broader push by the U.A.E. to become one of the world’s biggest funders of AI companies and infrastructure—and a hub for AI jobs.
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Funds
New York-based fintech investor Gilgamesh Ventures closed its second fund at $20 million.
People
The Cashmere Fund added Jenna Lyons, reality TV star and former president of J.Crew, as partner and investor at the firm.
Discern Security, a provider of AI-based security management, named Evgeniy Kharam as chief strategy officer.
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Airwallex, a Singapore-headquartered payments and financial systems provider, closed a $300 million Series F round at a $6.2 billion valuation. Investors included DST Global, Lone Pine Capital, Square Peg Capital and Visa Ventures.
LMArena, an open community platform for evaluating AI models, picked up $100 million in seed funding. Andreessen Horowitz and UC Investments led the financing, which included participation from Laude Ventures and others.
Legora, a collaborative AI platform for lawyers, scored an $80 million Series B round led by Iconiq and General Catalyst. Iconiq’s Seth Pierrepont and General Catalyst’s Jeannette zu Fürstenberg will join the company’s board. Legora has offices in New York, Stockholm and London.
RevenueCat, a platform for managing consumer app monetization, added $50 million in Series C financing led by Bain Capital Ventures.
Siro, a New York-based in-person sales conversation insights provider, raised $50 million in Series B funding led by SignalFire.
Veesion, a France-based startup using AI for physical security in retail environments, collected $43 million in Series B funding led by White Star Capital.
DataHub, a Palo Alto, Calif.-based open source metadata platform, landed $35 million in Series B funding. Bessemer Venture Partners led the round, with Partner Lauri Moore joining the board.
Trawa, a Berlin-based data-driven electricity provider for businesses, grabbed €24 million in Series A funding led by Headline.
Palmstreet, a Menlo Park, Calif.-based live shopping app for items including plants and handmade crafts, raised $25 million from investors including Andreessen Horowitz, Craft Ventures and others.
Clair, a New York-based embedded early wage access provider, secured $23.2 million in Series B financing led by Upfront Ventures.
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Here is our weekly roundup of stories from across WSJ Pro that we think you'll find useful.
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A more humanlike generation of customer-service voice bots is here, spurred by advances in artificial intelligence and a flood of cash.
PepsiCo is pushing back its climate goals. Its sustainability chief says the world “was a very different place” when it set its targets.
An AI-generated PR pitch succeeded in generating attention—and hostility.
Former audit regulators, academics and investors are preparing to fight the proposed elimination of an accounting oversight board created after Enron.
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Kraken staff monitoring energy data at the company’s headquarters in London, U.K. PHOTO: KRAKEN
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It’s never been harder to make it in venture capital (Bloomberg)
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Startup employee stock sales set to surge with IPOs uncertain (The Information)
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